Worldwide income vs Japan-source income
Employment, services, rent, investments, businesses, pensions, and payments made overseas.
What Japan can tax depends on your residency category and where income arises: work done in Japan is Japan-source even if paid abroad, permanent residents are taxed on worldwide income, and non-permanent residents add foreign income paid in or remitted to Japan.
Effective: 2026-01-01 to 2026-12-31
Professional review pending — treat as draft and confirm with the authorities.
Key points
- Work performed in Japan is Japan-source income, even if paid overseas.
- Permanent residents (for tax) are taxed on worldwide income.
- Non-residents are taxed only on specified Japan-source income.
- Where the money is paid does not decide the source.
What is Japan-source
Japan-source income includes employment or service income for work physically performed in Japan, rent from Japanese property, gains on Japanese assets, and Japanese business income — regardless of where it is paid. A foreign employer paying into an overseas account does not change the source. Non-residents are generally taxed only on such Japan-source income, often via withholding.
Residency and scope
Residency then sets the wider scope: permanent residents for tax are taxed on worldwide income (all foreign income too), while non-permanent residents add foreign-source income only to the extent it is paid in or remitted to Japan. Treaties can reassign some source-country taxing rights, so a cross-border position should be confirmed against both domestic law and any treaty.
Who this is for
- Foreign residents with overseas income
- Anyone unsure what Japan taxes
What this is not
- Country-specific treaty advice
- Paying salary abroad does not make Japan-work income untaxed in Japan.
Frequently asked questions
How does tax residency work in Japan?
For tax, Japan classifies you as non-resident, non-permanent resident, or permanent resident — separate from your immigration status. Broadly: non-residents are taxed only on Japan-source income; non-permanent residents (in Japan under 5 of the last 10 years, without permanent intent) are taxed on Japan-source income plus foreign income paid in or remitted to Japan; permanent residents (for tax) are taxed on worldwide income. This affects foreign income and investments, so confirm your category with the NTA or a tax accountant.